Q. Consider the following statements:
1.In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.
2.In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.
Which of the statements given above is/are correct?
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Correct Answer : d) Neither 1 nor 2
Question from UPSC Prelims 2020 GS Paper
Explanation:
Procurement at Minimum Support Price (MSP)
In the case of all cereals, pulses, and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. This statement is incorrect. While the government does set MSPs for various crops to provide a safety net to farmers, the procurement at MSP is not unlimited. The government and its agencies procure crops at MSP based on demand, storage capacities, and budgetary constraints. Additionally, not all crops procured at MSP are done so across all states and UTs; it often depends on the surplus production in a particular region and the central and state governments’ policies.
Market Price and Minimum Support Price (MSP)
In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. This statement is also incorrect. The MSP is essentially a safety net intended to protect the farmer against any sharp fall in farm prices. It is not designed to cap the market price of these commodities. Market prices can and do rise above the MSP, influenced by factors such as demand and supply, quality of the produce, and market conditions. The MSP is set to ensure that farmers get a minimum profit for their harvest, but it does not prevent market prices from rising above these levels.
Therefore, neither of the statements provided is correct, making option d) the right choice.
